Pound in peril without AAA, senior economists warn

More warnings from top advisers today, as fears for the currency continue to grow in light of the UK’s slipping credit rating

Chancellor George Osborne has been urged to take action quickly (Peter Macdiarmid)

THE POUND is expected to come under increasing pressure following the UK’s
loss of its AAA credit rating, leading economists have warned.

The news ratchets up pressure on Chancellor George Osborne to take remedial
action in next month’s budget.

Sterling fell late on Friday after ratings agency Moody’s downgraded Britain
to AA1, warning sluggish growth would continue for years.

Analysts warned today of a “major” negative effect on the value of the pound
and to GDP.

The UK currency has already come under significant pressure this year amid
mounting fears of a downgrade, as growth and public borrowing figures
continue to disappoint, with sterling falling about 7% against the US dollar
to 1.51 US dollars.

It has also fallen strongly against the euro to 1.15, as the UK’s deepening
economic woes contrast with increasing optimism in the eurozone amid hopes
the single currency will survive after the European Central Bank